Boardroom Battle Looms as Southern Cross Media Faces Activist Challenge

Boardroom Battle Emerges

Southern Cross Media Group (ASX: SXL) finds itself at the centre of a shareholder tussle after Sandon Capital, a significant investor, lodged formal notices seeking to remove four directors from the board. The proposed removals target Heith Mackay-Cruise, Ido Leffler, Carole Campbell, and Marina Go, signaling a clear challenge to the current leadership.

However, Southern Cross Media has not been formally required to convene a general meeting to consider these resolutions, and no alternative director nominations have been put forward. The company views Sandon’s move as a distraction and an unnecessary expense, urging the activist investor to withdraw its notices.

Strong Shareholder Backing for Current Board

Crucially, Southern Cross Media enjoys the backing of shareholders representing more than half of its voting capital. Notable supporters include Thorney Investment Group with 15%, Spheria Asset Management with 10%, and Ubique Asset Management also holding 10%. These investors have publicly declared their intention to oppose Sandon’s resolutions, reinforcing confidence in the existing board and management team.

This majority support suggests that Sandon’s campaign faces an uphill battle, at least in the near term, and highlights a divided shareholder register with contrasting views on the company’s strategic direction.

Operational Momentum and Strategic Moves

Southern Cross Media is not just defending its boardroom position; it is also pointing to solid operational performance as evidence of its effective leadership. The company reported approximately 9% growth in audio revenues during the first four months of 2025, surpassing prior guidance. Additionally, it has revised its non-revenue related cost expectations for FY25 downward by $5 million to around $265 million.

Further bolstering its outlook, Southern Cross Media plans to resume dividend payments with a final dividend for FY25, signaling confidence in cash flow and profitability. The company also announced a binding agreement to sell its remaining regional television assets in Tasmania, Spencer Gulf, Broken Hill, Mt Isa, Darwin, and other remote areas to Seven West Media, a move likely to streamline operations and sharpen focus on core audio businesses.

Share Price and Market Reaction

Sandon Capital’s initial investment in Southern Cross Media was at $0.51 per share in October 2024. Since then, the share price has climbed nearly 40%, closing at $0.71 on May 9, 2025. This appreciation reflects market optimism about the company’s recent performance and strategic initiatives, potentially undermining Sandon’s argument for board change.

While the board dispute introduces some uncertainty, the strong shareholder backing and positive operational updates suggest Southern Cross Media is well-positioned to maintain its current course.